A few weeks ago, the Wall Street Journal reported that ETS has explored the possibility of selling both the GRE and TOEFL tests. In the days ahead, it may be worth exploring how things got to this point. After all, here we have a major non-profit testing organization allegedly considering the sale of its two biggest testing products.
As I’ve indicated here before, my interest in the business practices of testing organizations is rooted in the fact that they have an enormous impact on the lives of tens of millions of young people around the world. When it comes to organizations providing language testing, that impact is mostly felt by people living in the Global South who are asked to pay test fees that can sometimes equal a week or even a month’s wages. Accordingly, I think it is incumbent on everyone to keep a close eye on the balance sheets of such organizations.
With that in mind, I present part one of my 435-part series, “Better Know a Testing Company.”
This installment explores some of the challenges ETS may have faced in recent years when it comes to program service revenues. It explores the state of the GRE and TOEFL, as well as a few other tests provided by ETS. To summarize my point, revenues related to testing appear to be down.
It is often the case that when revenues are down things have to change.
Don’t take this the wrong way, though. The piece is not a judgement of ETS’s business practices. Indeed, revenues are down mostly because of factors outside of that organization’s control.
GRE
GRE volumes peaked in 2015/16 when the test was taken 584,677 times. A year later Science published an article titled “GREs Don’t Predict Grad School Success. What Does?” And the Atlantic published “The Problem with the GRE.” This was the beginning of #greexit. Note that this was a pre-pandemic phenomenon.
By 2023/24, the number of test takers had dropped to 256,215.
A volume drop of 328,462 tests at $220 a test means a loss in revenue of about 72 million dollars. But it also means a loss in revenue from high margin stuff like score sending fees ($40 per school), the GRE search service ($1.25 per lead) and PowerPrep practice tests ($45 each). Heck, test takers can still pay $20 to get their practice essays scored by the e-rater in just a few seconds.
That’s a lot of money. And it is worth mentioning that half of the GRE subject tests (remember those?) have been completely discontinued.
Was this avoidable? I’m not sure. ETS shortened the test from four hours to two hours in 2023. That reduced their costs a bit and made it more attractive to students… but if schools are communicating that the GRE doesn’t play a big role in admissions decisions, there isn’t much that ETS can do to convince people to take the test no matter its length. Perhaps ETS could have built a test that admissions people found more convincing and useful, but that’s an incredibly tall order.
TOEFL
As for the TOEFL, volume numbers aren’t publicly disclosed. According to comments made by ETS head Amit Sevak to the PIE shortly after he joined the firm, the test was taken about a million times circa 2021/22. By all accounts, it has lost some market share to Duolingo and other providers since then. Take my bloviations with a grain of salt, as always, but I peg it at about 700,000 administrations per year nowadays. At an average price-tag of about $250 (the cost ranges from $180 to $475 depending on the country), that’s another $75 million in lost revenue. Plus all the high-margin extras.
Could this have been prevented?
To some extent, perhaps. The TOEFL is still useful. People still need to take English tests. The problem here isn’t that the test has lost its perceived usefulness. Indeed, it is still perceived as very useful. TOEFL has lost market share as students have piled into tests that they find more attractive than the TOEFL. Accordingly, the inclusion of more attractive features could have helped TOEFL maintain market share and volumes.
Speaking of attractive products, the TOEFL was relaunched a few weeks ago. The new test is described as “fair, agile, smart, tailored.” ETS has received much praise for the relaunch… with some claiming that it is, in fact, a more attractive test than the old TOEFL.
Mission accomplished!
Just remember that the new test is awfully similar to the “TOEFL Essentials” product that was announced back in May of 2021. There is little that is totally new here. A c-test has been grafted on to the reading section, and the number of adaptive levels has been reduced from 3 to 2. The newness seems to mostly come from the fact that this stuff is now part of the mainline TOEFL iBT product, rather than being offered as a separate test.
What I’m saying here is that perhaps the old TOEFL could have been replaced five years ago.
It is also worth mentioning that many (many, many) of the people who built (and continue to build) the Duolingo English Test are former ETSers. Had things gone a little bit differently they could have built a similar test at ETS and had it ready to go even before the pandemic hit.
TOEIC
The TOEIC was taken 4.8 million times in the final pre-pandemic year. It was taken 3.2 million times in 2024. The volume drop is most pronounced in Japan (the test’s biggest market), where stats are publicly available. Anecdotally, it seems to have dropped a lot in Korea (its second biggest market) as well. ETS collects a per-head fee from local partners who run the TOEIC in each country, but I don’t know the exact amount
Other Tests
The portion of ETS’s state-level testing business done via Questar was sold to the NWEA in October of 2021.
The HiSET test was sold to PSI in November of 2021.
The ETS Proficiency Profile was moved to Territorium in July of 2023.
ETS stopped administering and developing the SAT on behalf of the College Board in 2024. These are duties ETS had carried out since its founding in 1947. In its final year, ETS’s contract with the College Board accounted for 30% of its operating revenues, or about $300 million dollars. ETS continues to be involved in some College Board programs, including the AP tests, but the value of the contract for these services is unknown.
The Test de Francais International was discontinued in February of 2025.